Income: Your Client's Most Valuable Asset
It is income that makes possible the ability not only to live well today, but to plan and build toward a prosperous future. Younger people, especially, tend not to have considered just how valuable their ability to work and earn income actually is. Most of us think of income in terms of a monthly or annual amount. When looked at over one’s entire working life, though, it becomes apparent that the ability to earn an income is by far your typical client’s most valuable asset. This chart demonstrates the total cumulative value of an individual’s annual income – an indication of the individual’s Human Life Value. For example, a 35-year-old now earning $150,000/year could potentially have a lifetime earning capacity of approximately $7,136,312.
What is Your Income Worth?
Your client’s income is also a vulnerable asset – more than most people realize. Many have not been educated about the threat posed by a serious illness or injury to their financial well-being. Others refuse to consider the possibility of becoming disabled. While life insurance protects a family against the loss of income suffered due to the loss of a breadwinner, with a disability a family’s financial picture could be worse than if the main provider died, given increased medical costs and other expenses.
So, how great is the threat of disability? Statistics show that the chances of an individual becoming disabled are much higher than one might expect, and higher than the chances of dying anytime during the prime earning years. Keep in mind that statistics alone do not convince a client to buy insurance. On the other hand, you need to know the facts. The fact is:
- A typical male has a 21% chance of becoming disabled for 3 months or longer during his working career, and a 38% chance that the disability would last 5 years or longer. His average disability would last 82 months.
- A typical female has a 24% chance of becoming disabled for 3 months or longer during her working career, and a 38% chance that the disability would last 5 years or longer. Her average disability would last 82 months.
Even given the facts, most people feel that disability “won’t happen to me.” One of the reasons for this attitude is that they associate disability with serious injuries (e.g. the quadriplegic in a wheelchair). It is difficult for them to imagine themselves in such a condition – and they would rather not do so. They rationalize: “I am in a low-risk occupation. I drive carefully, and I don’t have any dangerous hobbies.”
Contrary to what most people believe, over 1 in 4 of today’s 20-year-olds will become disabled before they retire; furthermore, few disabilities result from accidents. The vast majority of disabilities – approximately 90% - result from illness, not injury. Consider the leading causes of disability in the graph.
Advances in medicine – diagnosis, treatments, and technology – have led to increasing morbidity rates (i.e. measure of incidence of disability) and decreased mortality. Fewer people in our society are dying of such diseases as hypertension, heart disease, diabetes, and cardiovascular disorders. This means, ironically, that more are becoming chronically disabled by these and other treatable diseases.
If illness or injury were to prevent you from working in the business:
- How long could you continue to take income from the business?
- How long could you continue to meet ongoing expenses such as rent, utilities, and employee salaries?
- Could you be replaced? How long could the business afford to pay a replacement?
- When would your customers begin leaving?
- How long could you afford to keep your employees?
- How will your creditors be paid?
- Could you continue funding your retirement plan?
- How long would your business be able to stay in business?
- Do you have an agreement that will preserve the value of your investment in the business?
- How long will your partners want to keep you in the business?
- Where will your partners get the money to buy you out?
If a key employee went out on disability:
Would you feel obligated to continue his or her pay?
For how long would you continue payments?
Do you have the paperwork that would make this possible?
Do you have a funding vehicle to make this possible?
As in a family, owners and employees are economically dependent on one another.
A disability to one member of the group will affect others, often in drastic ways.
DI Sales Concepts Brochure
These sales concepts can help prospective clients learn more about DI and how you can help them buy it. The job is to help prospective clients through the buying process. But it is hard to accomplish a successful sale without knowing the basic concepts behind the sale and the proper language to use.
This collection of field-tested disability sales concepts and narratives has been assembled to help communicate effectively with your prospects. These concepts are very straightforward as research shows that in order to motivate people to act, you’ve got to “keep it simple.” And also, have the ability to handle objections gracefully.
We think you’ll find many of these concepts to be useful in your practice, regardless of chosen selling approach or style. The collection is organized according to where in the buying process each concept can be useful.
Each concept includes a visual component as well as a suggested script. Many are most effective when sketched out as describing them, creating a “back of the napkin” effect. Take the time to learn and practice the concepts; then adapt them to your style.